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August 27, 2014

How to Create an Office Policy Manual

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How to Create an Office Policy Manual

With an easy-to read manual, your staff and associates will know what's expected of them. We explain how to write, produce, and distribute your company’s roadmap to success.

If you manage or own a real estate company, or any company for that matter, a well thought-out office policy manual is a must.

Why? It gives sales associates a solid understanding of your company’s mission and goals from their first day on the job, helps to avoid unnecessary confusion, and communicates company policies on e-mail, advertising, and other important topics.

“A good policy manual establishes trust, prevents misunderstandings and clarifies expectations for both the broker and the agent,” says David Fletcher, a broker and founder of Agent’s Boot Camp in Orlando, which develops training courses and products for new associates and independent brokerages.

Fletcher believes that not having a written policy manual is one of the biggest mistakes a broker-owner can make. When creating one, you’re forced to think through all of thorny issues that may come up in the day-to-day course of business — from commission disputes to dress code problems — and create a solution.

Office policy manuals also help reduce turnover. You should ask recruits to review the manual before choosing whether or not to come on board, Fletcher says. “It answers most questions the agent will eventually have in a professional way. In one sitting, [associates] can get a great idea what is expected of them and what they can expect of the broker.”

In this article, we’ll take you through the steps of creating an effective office policy manual, including:

What Topics Should the Manual Cover?

Your manual should encompass all of the basics: your mission statement, personnel policies, and general procedures such as office attire, sales meetings, office conduct, terminations, and vacations. However, it’s also important to include policies and procedures specific to real estate. Here are some suggestions. Remember, this list is meant only as a guide — it’s not all-inclusive.

Advertising. Explain your rules about signage, advertising language, when to use the equal opportunity slogans and logos, and open house ads, as well as the allocation of advertising costs and space. Show examples of ads whenever possible to illustrate what’s allowed and what’s not. Cross-reference the NAR Code of Ethics guidelines on advertising practices.

Acknowledgment Form. Ask salespeople and staff to sign the form to confirm that they’ve received the office policy manual and understand company policies.

Brokerage Relationships/Agency Disclosure.To respond to the needs of consumers today, real estate agents may represent buyers, sellers, or both. Informed consumers can choose from a variety of business relationships with real estate agents. NAR encourages real estate companies to have a written policy that addresses and outlines agency/brokerage relationships with consumers. It helps reduce potential liability by educating licensees on the different types of brokerage relationships that your company offers. Read more on agency disclosure.

Business Procedures. In this nuts-and-bolts section, be sure to include company policy for presenting offers, disclosure statements, delivering paperwork, and holding open houses. It also should include information about lockboxes and keys — where they’re kept and how they’re managed.

Commission and Fee Structure. Include splits, bonus plans, referrals, entitlement to commissions, and how you will resolve interoffice and intraoffice disputes over commissions.

Do-Not-Call Rules. Create an office policy even if you plan to hire an outside service to assure your compliance with the rules; it could protect your company from lawsuits resulting from a failure to comply. Include procedures on how you comply with the rules, how you will train personnel to comply, how you will maintain your do-not-call list, and your process for preventing telephone solicitations to numbers on the list. Read more on creating an office policy for do-not-call rules.

E-mail Communication. Cover computer, e-mail and telephone solicitation, and use of the Internet. Spell out rules for salespersons’ use of company names and logos on Web sites and in e-mails; cite rules for opt-in e-mail marketing and CAN-SPAM Act compliance; and address content copyright issues. Include a chapter on computer security, use of e-mail, and use of computers. Read more on developing Internet policies.

Ethical Standards. Provide a copy of the NAR Code of Ethics and explain how to file an ethics complaint.

Equal Opportunity. While not required by law, it’s a good idea to include an equal opportunity statement in your office policy manual, setting forth your company’s position. Here’s a sample equal opportunity statement: “The ____ company has been and is fully committed to equal employment opportunity, both in principle and as a matter of policy. Our employment policies and practices require that we provide equal opportunity to all applicants, independent contractors, and employees, without regard to race, color, religion, sex, national origin, age, or disability.”

Expenses. Clarify who bears responsibility for Board dues, MLS fees, and continuing education costs. Also, include information about overhead costs, such as who’s responsible for local and long-distance calls, postage and photocopying.

Fair Housing. Summarize fair housing regulations and include an equal opportunity statement indicating that applicants are considered without regard to race, color, religion, sex, national origin, age or disability.

Independent Contractor Agreement. This agreement should state that the salesperson’s compensation will be solely in the form of commissions, that the salesperson is not an employee, and that the salesperson will conduct business in accordance with the state’s laws and regulations.

Legal Assistance. Outline when you’ll make legal counsel available for sales associates and how you’ll handle lawsuits, threats of action, arbitration, and code of ethics and license law violations.

Listings. Write a policy for departing associates, covering the question of who “owns” clients and pending sales. Describe whether an associate may or may not take listings with him or her when they leave the company. Also, explain your MLS policies, including responsibility for entering listings and length of time listings can remain on your personal site after sale.

Other Requirements. Include your policy and information about errors and omissions (E&O) and liability insurance, continuing education and professional memberships.

Performance Reviews. Explain your policy for periodic review of employees, and how it offers the opportunity for evaluation and constructive comments by both parties.

Personal Assistants. Spell out a personal-assistant policy, including guidelines for hiring and supervising assistants, both licensed and unlicensed.

RESPA Compliance. RESPA violations can carry serious consequences. RESPA, or the Real Estate Settlement and Procedures Act, prohibits kickbacks for the referral of business incident to or part of a settlement service and also prohibits the splitting of a charge for a settlement service, other than for services actually performed. State regulations can impose additional constraints. It’s vital to include what is prohibited and what is allowed. Read more on how to comply with RESPA.

Sexual Harassment. Your policy should consist of an explanation of what constitutes sexual harassment, names of people to whom claims can be reported (other than the direct supervisor), a statement that no retaliation will occur from a claim, procedures that are followed when sexual harassment is alleged, disciplinary action to be taken against those who file a false claim, and your commitment to all employees on the issue. Take a quiz on sexual harassment awareness.

Workplace Privacy. Check with state laws on workplace privacy as you formulate your policy. Include access to performance and medical records; alcohol and drug testing; and monitoring of phone and/or e-mail use. Balance your need to maintain a safe, productive, and efficient workplace with your employee’s privacy rights. Put your policy in writing and ask employees to give their written acknowledgement.

How Should I Produce It?

As you determine what to put in your manual, you also have to figure out who will write it. Your best option depends on the size of your budget and whether or not you already have a core manual from which to draw.

“The best way to start writing a policy manual is to purchase one and revise it to meet [your] needs,” says Fletcher. “The broker needs to write it. The person responsible for procedures (such as contract processing) should write [that section] for the broker’s review. This is the person who best understands the paper trail and scope of the work,” says Fletcher.

Another option is to hire a human resources consultant to draw up a draft. You may want to borrow a copy of another company's manual to use as a guide. Contact your local REALTOR® association to see if it has a sample.

“If you can’t afford to hire a consultant to create a manual, you’ll have to assemble it from existing policies and procedures (written and unwritten), along with information from your state rules, regulations and laws,” says Darla J. Scott, CEO of Management Master.com in Philadelphia. “You’ll also want to develop day-to-day policies and create forms (such as Buyer Transmittal Form, Seller Transmittal Form and Listing Checklists) to help promote organization and efficiency within the office.”

It’s necessary to have an attorney review the document before it’s printed and distributed to staff. When it comes to issues such as regulatory compliance, terminations, and workplace privacy, you will want to have a legal expert’s advice and expertise on complying with state laws.

Make It Easy to Read

Your office policy manual should be attractive and user-friendly. It shouldn't be a chore to read.

That means using clear, concise, and uncomplicated language. Let someone else read the manual and ask for feedback; what’s clear to you may not be to a third party.

Also, clearly label each chapter and create a table of contents or an index so employees and salespeople can jump to the topic they're looking for.

To set an upbeat tone, use positive statements, not negative ones, whenever possible. Don’t tell workers what they can do, instead what they will do.

For real estate salespeople who are always on the go, an online version of the guide makes good business sense. Another benefit of an electronic version: you can easily make changes to and update the document without having to spend a bundle printing new manuals.

What’s Next?

Distribute your finished office policy manual to everyone on staff and let them know where to find it on the Web or company intranet. Make sure that every new employee has his or her own copy, and require staff to sign a statement acknowledging they have read and understand the manual.

Remember: an office policy manual is a living document. Develop a maintenance plan to keep it accurate. Update the policy manual as laws and the organization's priorities change, and schedule regular reviews of the manual and update accordingly.

Sources: Book Smart: How to Make a Valuable Office Policy Manual (Florida REALTOR® Magazine, 2005), Don’t Risk It: A Broker’s Guide to Risk Management, 2ndEd. (NATIONAL ASSOCIATION OF REALTORS®, 2000), REALTOR.org.

More Resources

Field Guide to Real Estate Office Policy Manuals
The articles and books in this Field Guide provide tools and tips to create a policy manual, covering subjects ranging from policies and procedures to cell phone usage and more.

MicrosoftOffice.com: Creating an Office Policy Manual
Free tips, demos, and templates, including an outline to help you develop your manual and a form letter that employees can sign to acknowledge they read it.

eHow.com: How to Write Policies and Procedures for Your Business
An 8-step guide to creating an office policy manual, with related how-to articles on employee evaluations, being politically correct, and counseling your staff./p>

TemplateZone.com: How to Write a Policy Manual
This free PDF document, offered by a Web site that sells office policy manuals, explains the importance of an office policy manual and how to get started creating one. It’s not real estate specific, but provides good tips nonetheless.

U.S. Department of Labor: The Fair Labor Standards Act
Learn about the federal regulations regarding employee record-keeping, minimum wage, overtime, and other important topics.

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